A well-drafted Commercial Building or Space Lease Agreement will:

  • Describe the lease term and price.
  • Describe whether the lease term may be extended with proper notice.
  • Allow for periodic rent increases.
  • Restrict use to certain anticipated activities.
  • Provide for the payment of utilities, repairs, taxes and insurance.
  • Provide terms for the assignment or sublease of the premises.
  • Provide terms related to both parties' remedies upon default of any provision of the lease.
  • Provide for the installation and maintenance of a security/alarm system.
  • Provide terms for access to the premises by the Landlord.


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Often, a Landlord for a commercial office space will give a prospective tenant a very one-sided lease agreement to review. Any such prospective tenant should consult an attorney and submit along with the landlord's lease an addendum, which works to even the terms of the lease balancing the wants and needs of the tenant against the wants and needs of the Landlord.

Introductory Note
This is a complex lease agreement in at least three parts. First, there is the Standard Lease, which applies to all tenants and sets out nearly all the terms of the agreement, but does not reference any particular tenant or office space. Second, there is the shorter introductory lease, which applies to the individual tenant and is made a part of and references the Standard Lease. The much shorter introductory lease establishes terms not otherwise defined in the Standard Lease for each specific tenant (e.g., Tenant, Rent, Address, Term, Deposit, etc.). Third, there are the Rules & Regulations, which further define the agreed upon operation and maintenance of the property. In addition, the landlord may require a guarantee from the tenant. Conversely, the tenant may attach an addendum detailing changes to the agreement offered by the Landlord.

Property Description
Legal description of the improved real estate and space being leased.

Lease Term
Usually, a standard one-year lease. NOTE: The shorter lease can benefit the tenant in a "soft" market. However, it is usually better for a tenant to negotiate a longer lease term simply because they may be able to lock-in a fixed rental rate over a much longer period of time (like 5-10 years).

The entire amount due for the year should be indicated and broken down into payments for respective months. First month's rent is usually due upon execution of the lease and thereafter in advance on the first day of the month. In many states, commercial rents are subject to the imposition of a sales tax.

Consumer Price Index Increases
This is a popular way of adjusting rent in cases of high inflation. Moreover, this agreement provides for annual increases of at least three percent, but not more than six percent. NOTE: If inflation exceeds six percent, this provision would be harmful to the landlord.

Restrictions on Use
Landlord does not want the business to operate as anything other than what was originally represented. This ensures integrity of ambiance and predictable insurance.

Often, the tenant and landlord share these expenses depending on actual use. For example, many units in a complex have individual meters and the tenant is responsible for each month's use accordingly. However, in other cases, the Tenant may be responsible for his pro-rata share according to the square footage he is renting notwithstanding actual use.

Condition of Premises
No improvements by tenant without express permission of landlord. Often, improvements require approval by the city following an application and notice of improvement by the tenant or landlord. For convenience sake, the landlord will want to retain ownership of any improvements to the space without compensation to tenant. Finally, landlord will want standard provision requiring tenant to keep the space clean and safe, keep all equipment in good working condition, and refrain from making noise or objectionable odors.

Restrictions on Use
Tenant must abide by all laws, rules, regulations, codes, etc. In cases of violation, landlord has right to enter to investigate and/or correct. If a lien is filed on property as a result of tenant, tenant must cancel/discharge the lien and wholly indemnify the landlord with respect to any liens or other encumbrances. Tenant may not maintain any hazardous materials on the premises.

Landlord is generally responsible for maintenance of the exterior walls and roof and all ventilation, plumbing and electrical not otherwise inside the leased space. Interior fixtures must be maintained in good working order by the tenant. Tenant is solely responsible for damage tenant's articles within the leased space.

Landlord reserves option to rebuild. If Tenant is deprived of use by more than 25% casualty, his rent will be abated in proportion to the impairment. No abatement if casualty is direct/proximate result of tenant's own negligence.

Assignments & Subletting
Requires prior written approval of landlord.

Tenant's Duties to Landlord
Indemnification provision related to injury to invitee, licensees and guests.

If tenant does not pay monthly rent after 15 days written notice, landlord may immediately terminate the lease and demand and recover from tenant expenses associated with early termination including actual and compensatory damages, interest and attorney's fees and costs.

Landlord may terminate lease immediately upon notice of tenant's death, bankruptcy, and/or insolvency, or if tenant assigns any interest for the benefit of a creditor. Landlord and their successors and assigns may also terminate if the property's ownership changes hands, or if the landlord decides to remodel the property, or if the landlord decided to demolish the building. However, landlord usually provides at least six months advance written notice of such termination due to the anticipated action to avoid having to compensate the tenant.

Tenant's Subordination
Tenant makes his lease inferior to any future successor in interest of landlord.

Security Deposit
As security guaranteeing payment of rent and performance of covenants. Any default by tenant will be paid out of this deposit, but will not cure the default nor act as a bar to landlord's rights of termination. Assuming no default, the security deposit will be returned in full at the expiration of lease term.

Landlord Access
Landlord may, at a reasonable time, access space for inspection and repairs as may be reasonably required.

Security & Alarm Systems
Landlord may provide and charge tenant his pro-rata share. Conversely, tenant may be allowed to install their own system, but landlord should be given proper information and instructions with respect to any third party system.

Liability Insurance
Landlord provides for minimum amounts of insurance required by tenant from an insurance company approved by the landlord. (General liability with respect to Bodily Injury per person and per occurrence and Property Damage.) Tenant should be required to provide adequate evidence of such coverage in the form of a certificate from the insurance company.

Property Taxes

Landlord usually pays this, but this expense is probably included in any operational fees assessed to tenants.

- Tenant may extend the term provided they are not in default of payment or other term. Landlord must receive written notice of intent to extend the lease. Usually, 90 days or more. Landlord should respond within 30 days thereafter.


Florida law requires landlords disclose the risks of exposure to radon gas.

Lead Paint

Federal law requires disclosure to tenants of the lead-paint hazards. Landlord should acknowledge the existence or non-existence of such paint and allow the tenant to conduct their own assessment prior to close.

Mediation and Arbitration
Mediation and Arbitration should always specify a location in Client's jurisdiction (preferably, in the same county where they run their business). Mediation is a non-binding way to settle the dispute quickly and amicably. If unable to settle in mediation, arbitration is first option available. Arbitration is the preferred alternative to litigation because of speed, cost, and ability to maintain low profile (no info is publicly available).

Governing Law

Always stipulate that the contract will be governed under whatever law the Client ordinarily conducts business. Always make sure that venue and jurisdiction are as convenient to client (Buyer) as possible.

No Modification or Waiver

No modifications except those specifically agreed upon by the parties in writing. Any waiver of a term or provision will not act as a waiver of any other provision.

Notices should always list the current and best addresses where each party may contact the other for whatever reason.


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